Authored by the expert who managed and guided the team behind the Malaysia Property Pack
Everything you need to know before buying real estate is included in our Malaysia Property Pack
Property prices in Malaysia are experiencing moderate growth in 2025, with increases ranging from 2% to 5% annually, though certain hotspots like Johor and areas near major infrastructure projects are seeing stronger appreciation of up to 10%.
The Malaysian residential property market continues its recovery trajectory as we reach mid-2025, supported by robust economic fundamentals, government incentives, and strategic infrastructure developments. While growth rates have moderated compared to the pre-pandemic boom years, the market shows steady momentum with significant regional variations and emerging opportunities in transit-oriented developments.
If you want to go deeper, you can check our pack of documents related to the real estate market in Malaysia, based on reliable facts and data, not opinions or rumors.
Property prices in Malaysia are rising moderately at 2-5% annually in 2025, with hotspots near infrastructure projects seeing up to 10% growth.
The Johor-Singapore Special Economic Zone, transit developments, and government incentives are key drivers, though oversupply in luxury segments remains a concern.
| Key Metric | Current Status (June 2025) | Trend |
|---|---|---|
| Average House Price | MYR 486,678 (US$110,500) | ↑ 3.3% YoY |
| Price Growth Forecast 2025 | 2-5% nationwide, up to 10% in hotspots | Moderate growth |
| Overhang Units | 23,149 units (down 10.3%) | Improving |
| Rental Yields | 5.1% national average | Stable |
| Top Growth Areas | Johor, KL (near MRT), Penang | Strong demand |
| Foreign Investment | RM170 billion from China alone | Increasing |
| Government Support | RM10 billion Housing Credit Scheme | Active |
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
What are the current property price levels in Malaysia as of June 2025?
The average house price in Malaysia stands at MYR 486,678 (approximately US$110,500) as we reach mid-2025, representing a 3.3% increase from the previous year.
Property prices vary significantly across different states and property types. Kuala Lumpur commands the highest average prices at MYR 794,467 (US$180,274), followed by Selangor at MYR 553,693 (US$125,639). More affordable options exist in states like Melaka and Perlis, where average prices hover around MYR 240,000-245,000 (US$54,000-55,000).
The Malaysian House Price Index reached 224.2 points in Q4 2024, showing a slight quarterly decline of 2.01% but maintaining positive year-on-year growth. This indicates that while the market continues to appreciate, the pace of growth has moderated compared to the rapid increases seen in previous years.
By property type, detached houses remain the most expensive at an average of MYR 648,403, while high-rise units (condominiums and apartments) offer more affordable entry points at around MYR 378,414. Terraced houses, popular among middle-income families, are priced at approximately MYR 466,506.
Foreign buyers face minimum purchase thresholds that vary by state, with most states requiring a minimum investment of MYR 1 million, though some states like Selangor have higher thresholds at MYR 2 million.
How much have property prices increased in Malaysia over the past 12 months?
Malaysian property prices rose by a modest 1.4% year-on-year in 2024, marking a significant slowdown from the 3.85% growth recorded in 2023 and 3.9% in 2022.
When adjusted for inflation, real property prices actually experienced a slight decline of 0.27% in 2024, suggesting that price growth has barely kept pace with the general increase in living costs. This represents a more sustainable growth pattern compared to the double-digit increases seen during previous property booms.
Over the past five years, cumulative price growth has been approximately 10-15%, with annual growth rates ranging from 1.2% to 3.9%. This steady but moderate appreciation reflects a maturing market that has moved away from speculative growth toward more fundamentals-driven increases.
The moderation in price growth can be attributed to several factors, including Bank Negara Malaysia's stable interest rate policy (maintaining the Overnight Policy Rate at 3% since May 2023), improved supply-demand balance, and government efforts to cool speculation in the property market.
Despite the slower growth, transaction volumes have remained healthy, with residential property transactions reaching 192,484 units in the first nine months of 2024, representing a 4.9% increase in volume and 6.9% increase in value compared to the same period in 2023.
Which areas in Malaysia are experiencing the strongest property price growth in 2025?
Johor emerges as the standout performer in 2025, driven by the transformative Johor-Singapore Special Economic Zone (JS-SEZ) spanning 3,571 square kilometers across six cities and townships in southern Johor.
The state attracted RM18 billion in foreign direct investment in Q3 2024 and RM30.5 billion in Q4, creating unprecedented demand for both residential and commercial properties. Properties near the upcoming Rapid Transit System (RTS) Link stations in Iskandar Malaysia are experiencing particularly strong appreciation, with prices ranging from RM1,000 to RM1,300 per square foot.
Kuala Lumpur's transit-oriented developments continue to attract premium prices, especially areas near the upcoming LRT3 line (operational by Q3 2025) and future MRT3 stations. Established neighborhoods like KLCC, Bangsar, and Mont Kiara maintain their appeal to high-net-worth individuals, while emerging areas in KL South and North benefit from improved connectivity.
Penang, particularly the Timur Laut district encompassing George Town and Tanjung Bungah, shows robust growth of 5.4% year-on-year. The island's blend of cultural heritage and modern amenities continues to attract both local and international buyers, with young professionals and first-time homebuyers driving demand.
It's something we develop in our Malaysia property pack.
What types of properties are seeing the biggest price increases in Malaysia?
Landed properties, particularly terraced and semi-detached houses, are experiencing the strongest demand and price appreciation in 2025, with annual growth rates of 1-2% nationwide but higher in key urban areas.
The preference for landed homes intensified post-pandemic as buyers prioritize space for remote work, homeschooling, and leisure activities. Selangor saw a 5% rise in demand for landed properties in 2024, with areas like Petaling Jaya's SS2 recording 4.7% year-over-year price increases for 2-storey terraced houses.
| Property Type | Average Price (MYR) | YoY Growth | Market Dynamics |
|---|---|---|---|
| Terraced Houses | 466,506 | 1-2% | Strong demand, limited supply in mature areas |
| Semi-Detached | 730,851 | 1.5-2.5% | Popular among upgraders, family-oriented buyers |
| High-Rise Units | 378,414 | 1.8% | Mixed performance, oversupply in some areas |
| Detached Houses | 648,403 | 2-3% | Premium segment, limited new supply |
| Affordable Housing | <500,000 | 2-4% | Government support, high demand from first-time buyers |
Affordable housing (below MYR 500,000) shows consistent appreciation due to strong demand and government support. Approximately 65% of new launches fall within this price range, reflecting developers' response to market demand and government policies promoting homeownership.
The luxury high-rise segment faces challenges with significant oversupply, particularly in Johor Bahru's CBD which has 10,624 unsold serviced apartments. However, well-located condominiums near transit stations or in established neighborhoods continue to perform well.
Get fresh and reliable information about the market in Malaysia
Don't base significant investment decisions on outdated data. Get updated and accurate information with our guide.
What are the property price forecasts for Malaysia in 2026 and beyond?
Property experts project Malaysian residential prices to grow between 2% and 5% annually through 2026, with well-located developments potentially achieving higher appreciation rates of up to 10%.
The Association of Valuers, Property Managers, Estate Agents and Property Consultants (PEPS) emphasizes that the days of double-digit growth are unlikely to return, as they are unsustainable. A 4% growth rate, while not exciting for speculative investors, represents healthy appreciation that aligns with bank interest rates and economic fundamentals.
Medium-term projections suggest the Malaysian property market will grow at a compound annual growth rate (CAGR) of 6.6% through 2030, potentially reaching a market size of USD 54.06 billion. This growth will be driven by continued urbanization, infrastructure development, and Malaysia's position as a regional investment hub.
Long-term forecasts extending to 2035 and 2045 remain optimistic but measured. Analysts expect Malaysia to strengthen its position as a regional property investment destination, with growth supported by demographic trends, technology adoption, and sustainable development initiatives. Strategic corridors linked to major infrastructure projects are expected to outperform the broader market.
The market's future trajectory will largely depend on successful implementation of major projects including the East Coast Rail Link, RTS Link, MRT3, and the full development of the Johor-Singapore SEZ. These infrastructure investments are expected to create new growth corridors and reshape property values in connected areas.
How are government policies affecting property prices in Malaysia in 2025?
Budget 2025's comprehensive support measures are significantly impacting the property market, with RM10 billion allocated for the Housing Credit Guarantee Scheme to assist over 20,000 first-time homebuyers purchasing properties up to MYR 500,000.
The government provides tax deductions up to MYR 5,000 for first-time buyers purchasing homes priced between MYR 500,000 and MYR 750,000, effectively reducing entry costs for middle-income families. Additionally, RM900 million has been allocated for affordable housing projects including 48 People's Residency Programs and 14 Rumah Mesra Rakyat developments.
The Residensi Madani initiative plans to construct 8,000 affordable units in Federal Territories by 2027, priced between MYR 150,000 and MYR 200,000, specifically targeting the B40 income group. This substantial increase in affordable supply helps moderate overall price growth while addressing the critical housing affordability challenge.
Infrastructure spending continues to drive property values, with major projects like the LRT3 (completing Q3 2025), RTS Link (2027), and MRT3 (2027) creating new property hotspots. The government's focus on transit-oriented development encourages higher density development near public transportation, supporting both affordability and sustainability goals.
These policies create a dual effect: supporting demand through financing assistance and incentives while increasing supply through affordable housing programs. This balanced approach helps maintain steady price growth without creating unsustainable bubbles, benefiting both developers and homebuyers.
What impact is foreign investment having on Malaysian property prices?
Foreign investment, particularly from China and Singapore, continues to influence specific market segments, with Chinese FDI alone reaching RM170 billion (US$35.9 billion) through various channels including the Malaysia My Second Home (MM2H) program.
The revised MM2H program now requires visa holders to purchase local property, creating additional demand in the luxury segment. Foreign buyers primarily target properties priced between RM1 million and RM2 million, with concentration in Kuala Lumpur, Selangor, Penang, and Johor. From the program's inception to early 2025, 58,468 MM2H passes have been approved, including 28,528 principal applicants.
Singaporean buyers show particular interest in Johor properties, especially areas near the upcoming RTS Link and within the Johor-Singapore SEZ. Properties in Iskandar Malaysia remain 20-30% cheaper than comparable Singapore properties, attracting both investors and actual residents who work across the border.
Despite substantial foreign investment, the actual impact on nationwide residential prices remains moderate. Foreign buyers represent a small percentage of total transactions, with their influence largely confined to specific luxury developments and geographic areas. State-level restrictions, including minimum purchase prices and quotas, help prevent excessive foreign speculation.
We detail all of this in our Malaysia property pack.
How does Malaysia's property market performance compare to other Southeast Asian countries?
Malaysia maintains one of the most affordable property markets in Southeast Asia with a price-to-income ratio of 8.7, significantly lower than regional peers like Vietnam (25.8), Thailand (25.2), or Singapore (23.2).
| Country | Price-to-Income Ratio | Affordability Index | 2025 Growth Forecast | Avg Urban Price (USD) |
|---|---|---|---|---|
| Malaysia | 8.7 | 1.6 | 2-5% | $110,000 |
| Indonesia | 14.9 | 0.6 | 2-4% | $70,000-100,000 |
| Vietnam | 25.8 | 0.3 | 5-7% | $80,000-120,000 |
| Thailand | 25.2 | 0.5 | 2-5% | $120,000-300,000 |
| Singapore | 23.2 | 0.6 | 3-6% | $800,000+ |
| Philippines | 18.5 | 0.4 | 3-5% | $90,000-150,000 |
We made this infographic to show you how property prices in Malaysia compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It's an easy way to spot where you might get the best value for your money. We hope you like it.
Kuala Lumpur property prices remain significantly more affordable than Bangkok, Ho Chi Minh City, or Singapore, offering better value propositions for both owner-occupiers and investors. The combination of relatively low prices, stable political environment, and good infrastructure makes Malaysia attractive for regional property investment.
While Malaysia's price growth of 2-5% appears modest compared to Vietnam's projected 5-7%, it reflects a more mature and stable market. The lower volatility and better affordability metrics make Malaysian property particularly appealing for long-term investors seeking steady returns rather than speculative gains.
What is the current state of property oversupply in Malaysia?
Malaysia's residential overhang situation shows significant improvement in 2025, with unsold completed units dropping to 23,149 units valued at RM13.94 billion, representing a 10.3% decline in volume and 21.2% decrease in value from 2024.
The overhang remains concentrated in specific segments and locations. Condominiums and apartments account for nearly 60% of total overhang units, while Johor maintains the highest absolute numbers despite recent improvements. The state's overhang is expected to ease as the Johor-Singapore SEZ attracts more residents and workers.
Price-wise, properties in the RM500,000 to RM1 million range constitute 33.6% of overhang units, followed by the RM300,000-500,000 segment at 29.3%. Interestingly, while luxury properties above RM1 million represent only 13.6% of overhang volume, they account for 40.7% of total overhang value at RM7.5 billion.
Several factors contribute to the persistent overhang, including unreleased Bumiputera lots (accounting for 40-50% of overhang in some states), location mismatches, and the continued challenge of serviced apartments which recorded 21,683 unsold units. The overhang peaked at over 30,000 units in previous years, so the current levels represent substantial progress.
Market absorption rates are improving due to better economic conditions, government homeownership campaigns, and developers' increased focus on building products that match market demand. The gradual reduction in overhang since Q1 2024 signals improving balance between supply and demand.
Are rental yields in Malaysia attractive for property investors in 2025?
Rental yields in Malaysia average 5.1% nationally as of Q1 2025, maintaining relatively stable returns despite slight moderation from 5.24% in Q3 2024.
Kuala Lumpur apartments offer varied yields ranging from 2.93% to 6.46%, with a city average of 4.6%, lower than the national average due to higher property prices. Secondary cities and suburban areas often provide better yields due to lower entry prices while maintaining steady rental demand.
The rental market shows robust growth fundamentals, with PropertyGuru's rental price index recording strong year-on-year increases throughout 2024. However, Malaysia's rental market remains relatively small, with only 6% of housing stock in the private rental sector compared to 85% owner-occupied properties.
For investors, the combination of moderate capital appreciation (2-5% annually) and stable rental yields (5.1% average) provides total returns of 7-10% in well-selected properties. Properties near universities, business districts, and upcoming transit stations typically command premium rents and better yields.
The detailed analysis is available in our Malaysia property pack.
How is Malaysia's economic performance supporting property prices?
Malaysia's economy grew 5.2% in 2024 and maintains projected growth of 4.5-5.5% for 2025, providing solid fundamental support for the property market.
Low inflation projected at 1.5-2.5% for 2025 helps maintain affordability while supporting real price appreciation. The stable overnight policy rate at 3%, unchanged since May 2023, provides certainty for mortgage borrowers and encourages property investment.
Strong foreign direct investment, particularly in technology, manufacturing, and data centers, creates employment and drives housing demand. The MADANI Economy framework's focus on high-value industries brings well-paying jobs that support higher property prices in key employment centers.
The unemployment rate falling to 3% in April 2025 - the lowest in a decade - strengthens household formation and homebuying capacity. Rising household incomes, particularly among young professionals in technology and service sectors, support demand for both affordable and mid-range properties.
Malaysia's stock market performance, with the KLCI index up 13% in 2024 and outperforming regional peers, reflects broader economic confidence that typically translates into property market strength. The wealth effect from rising financial assets often drives property upgrades and investment purchases.
What challenges could limit property price growth in Malaysia?
Despite positive fundamentals, several factors could constrain property price appreciation in the Malaysian market through 2025 and beyond.
- Affordability constraints: Despite being more affordable than regional peers, the price-to-income ratio of 8.7 remains challenging for many Malaysians, particularly young first-time buyers facing rising living costs
- Oversupply in luxury segment: Continued overhang in high-end condominiums, especially in Johor Bahru and parts of Kuala Lumpur, creates downward price pressure in this segment
- Global economic uncertainty: Trade tensions, particularly US-China rivalry and potential impacts of the Trump administration's policies, could affect Malaysia's export-dependent economy
- Rising construction costs: Persistent increases in building materials and labor costs pressure developer margins and may limit new affordable housing supply
- Interest rate risks: While currently stable, any future rate increases could impact affordability and dampen demand, particularly for highly leveraged buyers
- Demographic shifts: Slowing population growth and urbanization rates compared to previous decades may moderate long-term housing demand
- Competition from other investments: Rising returns from financial markets and alternative investments could divert funds from property investment
- Regulatory changes: Potential tightening of foreign ownership rules or new property cooling measures could impact specific market segments
Conclusion
Based on comprehensive market analysis and current trends, the answer is: Yes - property prices in Malaysia are going up, but at a moderate and sustainable pace.
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
The Malaysian property market in 2025 demonstrates resilience and steady growth, with annual price increases of 2-5% expected across most segments. While this may not excite speculative investors accustomed to double-digit returns, it represents healthy, sustainable appreciation aligned with economic fundamentals.
For prospective buyers and investors, the current market offers opportunities particularly in areas benefiting from infrastructure development and government support. The combination of moderate price growth, stable rental yields around 5%, and improving economic conditions makes Malaysian property an attractive proposition for long-term investment rather than quick profits.
Sources
- Global Property Guide - Malaysia Property Market Analysis 2025
- PropertyGenie - Malaysian Property Market Growth Forecast 2025
- The Edge Malaysia - Real Estate Market Steady Growth Ahead
- MET Property - Malaysia Property Market Strong Growth 2025
- KL Property - Malaysia Property Market Outlook 2025
- Bamboo Routes - Malaysia Real Estate Price Forecasts
- Trading Economics - Malaysia Housing Index
- The Edge Malaysia - Local Consultants Poll Market Growth 2025
- Luxuo - Malaysian Property Outlook 2025
- Rahim & Co - Malaysian Property Market Steady Growth 2025
-Complete Guide for Foreign Property Buyers in Malaysia
-How Foreigners Can Buy Property Without MM2H
-Foreign Property Investment in Johor Bahru
-Guide to Buying Property in Kuala Lumpur
-Can Americans Buy Property in Malaysia?
-Foreign Ownership of Freehold Property
-Understanding Condo Maintenance Fees